EU and Chinese weak data preventing US growth, FED holds the line on rates
- US Market
- 7 months ago
According to the Fed’s chief, Jerome Powell, lacklustre E.U. and Chinese economies are halting the U.S. economy from making considerable gains.
Powell’s comments came shortly after the central bank’s decision to hold steady on interest rates during this week and the likelihood to be throughout the year
“Now we see a situation where the European economy has slowed substantially and so has the Chinese economy, although the European economy more.”
“Just as strong global growth was a tail wind; weaker global growth can be a headwind to our economy.”
The Fed reduced its outlook for GDP to 2.1% in 2019 from a 2.3% forecast in December, the lowered estimation came as a result following the FOMC’s decision to keep rates between a range of 2.25% to 2.5%.
In its post-meeting statement, the committee characterized the labour market as “strong” but said the “growth of economic activity has slowed,” a U-turn from January when the FOMC said activity “has been rising at a solid rate.”
That being said Powell stated the overall picture in the U.S. is still positive.
“Our outlook is a positive one … FOMC participants continue to see growth this year around 2 percent, just a bit below what we saw back in the end of last year.”
“Part of that is seeing that underlying economic fundamentals are still very strong. You have strong labour markets by most measures, you have rising incomes, you’ve got very low unemployment.”
Source: Smart Trend Team